KKB eyes more jobs from highway
Contracts from oil and gas sector scarce currently
KUCHING: Steel fabricator KKB Engineering Bhd is eyeing more supply and construction work from the ongoing Pan Borneo Highway project as opportunities in the oil and gas industry becomes scarce.
The company, via a joint-venture with WCT Holdings Bhd, had won the contract to build the Bintulu portion of the highway worth RM1.29bil last year.
Work on that particular stretch has started, which helped the company narrow its losses in the first quarter ended March 31.
Group executive director Kho Pok Tong is now looking for other opportunities related to the project.
“We are interested in participat- ing in the relocation of water pipes along the highway,” he said after the company’s AGM recently.
The Pan Borneo Highway project is more than 2,000 km long in total, from Kuching through Brunei and Kota Kinabalu before ending in Tawau.
KKB group owns and operates two steel manufacturing plants in Kuching and one in Kota Kinabalu with combined production capacity of 45,000 tonnes per annum. The group is the sole manufacturer of concrete-lined and polyurethane-lined steel water pipes of various sizes in Sarawak.
Kho estimated that betweeen 30% and 40% of the existing water pipes along the highway might need to be relocated, or replaced.
He said group had submitted bids for the supply of steel water pipes, tubular piles (for bridges), low/high tension steel poles, guard rails and other related steel products for several of the 11 work packages of the highway project.
KKB’s order book currently stands at RM1.31bil, the highest so far. It had submited tenders for RM356mil worth of contracts as of March 31 this year.
“The tender book for OceanMight Sdn Bhd (KKB oil & gas outfit) is about RM314mil while that of the engineering and manufacturing sector is RM42.4mil,” Kho said.
“The outcome of our tenders are expected to be known between the second and third quarter this year,” he added.
Kho said that with a net cash position of some RM120mil, this would firmly support the group’s ambition to undertake sizable projects.
OceanMight was scheduled to complete the engineering, procurement and construction of a wellhead riser platform for the offshore Bunga Pakma field in Block PM-3 CAA in the third quarter.
In the first quarter ended March 31, 2017, KKB reported a 94% jump in group revenue to RM42.9mil from RM22.2mil a year ago. The group’s net loss narrowed to RM1.48mil from RM1.96mil during the same period.
The loss was incurred partly due to the increasing cost of raw materials and higher direct overhead costs.
The revenue increase was contributed by the engineering sector, which soared to RM41.4mil from RM18.3mil previously. The manufacturing sector’s revenue was down to RM1.5mil from RM3.9mil previously due to lower offtake of LPG cylinders.
Kho said that under the current challenging economic environment, the group was focusing on its engineering and manufacturing as well as oil and gas sectors to ensure continued competitiveness and improved competency.
He said the group would identify and collaborate with strategic partners to increase its market share in the niche areas.
Last month, the company entered into a preliminary agreement with China-based State Nuclear Electric Power Planning Design & Research Institute Co Ltd to bid for projects in Sarawak.